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The Canadian Internet Registration Authority (CIRA) changed its conflict-of-interest regulations to discourage insiders from winning CIRA contracts, but then went ahead and gave a $30,000 technology project to one of its own directors.

According to the group’s president, the situation isn’t as sticky as it seems. “We knew we were going to take some heat, but our concern was to run a good, clean process,” said Bernard Turcotte.

Last December, CIRA sent out a request for proposals (RFP), looking for an industry analyst who could guide the not-for-profit organization through a new technology called E.164 Number Mapping, or “ENUM.” ENUM, a standard backed by the International Telecommunications Union (ITU), transforms telephone numbers into domain name system (DNS) entries. Mapped into DNS, phone numbers should be much more powerful locators than they are today. DNS entries can carry along with them various “naming authority pointers,” each one representing a device, be it a home phone, cell phone, office phone or even an e-mail inbox.

Through ENUM, instead of using different numbers and addresses to reach a colleague at any one of those contact points, you’d use just one — dial 555-1212 into an ENUM-enabled application to reach your co-worker at his home, his cell or his office PC. It’s one number for one person, rather than multiple numbers for multiple devices.

ENUM could have a profound impact on the domain system. That’s why CIRA is interested in the new technology. This group takes care of Canada’s top-level Internet domain, “.ca.” CIRA wants to define its position on ENUM so when the technology comes to light, it comes as no surprise.

The RFP said CIRA received an unsolicited bid to research ENUM and its impact on Canadian communication methods. Rather than work behind closed doors with an un-requested bid, CIRA’s board of directors decided on an RFP to make the process public and “to ensure transparency.”

The RFP also said that the original, unsolicited proposal “does not meet the requirements…and will not be considered.”

According to minutes recorded at CIRA’s Nov. 6 board meeting, Timothy Denton, one of the group’s directors and a lawyer specializing in Internet matters, made the original ENUM proposal. After his presentation the board decided that in the future, directors should not be granted CIRA contracts, unless special circumstances occur and the director is willing to take limited payment.

Minutes from CIRA’s next meeting on Dec. 10 confirm it: “As a general rule, the corporation should not award contracts to directors unless…there are very special circumstances and…the maximum compensation paid to a director is limited.”

Despite the new conflict-of-interest guidelines, however, on Jan. 22 CIRA announced that Denton had won the $30,000 ENUM contract.

Some industry observers expressed concern over this. It seems CIRA bent the rules to guarantee Denton the win, they said.

None of those skeptics would go on the record about their apprehensions, though. One said speaking up would count as a “CLM: career-limiting move,” afraid that questioning the registrar’s actions would work against any future attempts to win CIRA contracts.

Gabriel Ahad, CIRA’s spokesperson, dismissed those fears. “That’s ridiculous,” he said, reacting to the notion that his group would blacklist naysayers.

So just what were the requisite “very special circumstances” here that allowed CIRA to hire one of its own?

“I guess the biggest special circumstance was, as far as we could tell he was one of the best equipped people to do the job we wanted him to do,” said Turcotte, CIRA’s CEO. “You get a lot of consultants who are glad to take your money and put on a good show, but as of yet in Canada there isn’t a lot of people who are as specialized as Tim [Denton].”

Turcotte said CIRA got three “very good bids,” but after an evaluation process that included three independent assessments by CIRA adjudicators and interviews with each of the bid-makers, Denton’s proposal shined through. Turcotte added that Denton had to submit an entirely new bid because his original, unsolicited proposal didn’t meet the RFP’s requirements.

And no, Turcotte said, CIRA did not base the RFP on Denton’s original proposal. “We built up the RFP as a team; the other people on the team did not have a copy of the original proposal. We looked at what our needs were in this area and what we were trying to accomplish, and defined the RFP from that point.”

Some industry analysts said they were not aware of the RFP. Is CIRA satisfied that it disseminated news of the RFP sufficiently? Ahad, CIRA’s spokesperson, certainly is. He said he sent an e-mail about it to everyone on the Canadian Telecommunications Consultants Association’s list of members who deal with voice over IP, IP telephony, or any other technology related to ENUM.

“I’ve seen this happen before,” Ahad said. “In any leading edge, competitive industry you’re going to see sore losers in the end.”

Denton could not be reached for comment before press time.

Roberta Fox of Fox Group Consulting said Denton is probably the right man for the job, pointing out that he knows the Internet and telephony. “Somebody like him that has the experience, they’re very rare.”

“We knew we might drag some heat on this if we ended up picking Tim [Denton],” Turcotte said. “And to be really honest, if there were another proposal out there that was equal, I would probably have picked the other one, because it would have avoided this [controversy]. But everyone agreed what we needed now was the right stuff, even if we took a little bit of heat on it.”